Monday, April 30, 2007

A Lot of Money. Really. A Lot.

I generally don't waste time on this blog writing about Iraq. It's a miserable topic, and everything that I would want to say about it has already been said far more eloquently by others. But for various reasons, I've recently been trying to figure out the best way to convey how much money is currently being spent on the US effort in Iraq.

The number is in the neighborhood of $200 billion per year right now (and I'm not even getting into the enormous human costs, which are surely far greater). But the tricky part is finding a way to make that enormous but entirely abstract number mean something. That turns out to be quite a task.

Put simply, it's a really big number. And the human brain is just not equipped to really understand really big numbers like that. This problem always makes me refer to my copy of the Hitchhiker's Guide to the Galaxy for guidance. Here's what the introduction to The Hitchhiker's Guide says:

"Space," it says, "is big. Really big. You just won't believe how vastly hugely mind-bogglingly big it is. I mean, you may think it's a long way down the road to the chemist, but that's just peanuts to space. Listen..."

To be fair though, when confronted with the sheer enormity of the distances between the stars, better minds than the one responsible for the Guide's introduction have faltered. Some invite you to consider for a moment a peanut in Reading and a small walnut in Johannesburg, and other such dizzying concepts.

The simple truth is that interstellar distances will not fit into the human imagination.

And numbers as large as 200 billion are similarly out of reach of human understanding.

So instead, let's try this approach to convey the vastness of the amount of money being spent in Iraq: what else can you buy for $200 billion per year?

Would you like to provide more public services to the American people? Here are some things you could do. (Note: I'm not suggesting that we should do any of these things, just trying to give examples of how much money this is):

Provide free, federally-funded universal preschool to all 3 and 4 year olds in the US. Cost: ~$40 billion per year.

Double the number of police officers in the US from the current number of around 700,000 total. Put them all on the federal payroll. Cost: ~$50 billion per year.

Have the federal government pay the salary of every physician in the US. There are about 600,000 total, so if we gave each a total compensation package of around $180,000 per year (which would surely be a pay cut for many, but still isn't bad), the cost would be about $110 billion per year.

We could do all of these things together for the price of the US efforts in Iraq.

Do you like the space program? The cost of one NASA-sized space program (for that price you get a space shuttle program, numerous satellite launches, and the construction of your very own space station) is about $15 billion per year. For the price of the war in Iraq, we could have about 15 such space programs in the US. We could allocate them to all the biggest states - give one to California, one to Texas, one to Illinois, one to Ohio, etc. They could each have their own space station and shuttle fleet. They could compete over which shuttles have the snazziest paint jobs and license plates.

Or maybe construction is more your cup of tea. For $200 billion per year we could:

Demolish and rebuild every single high school in the US (there are about 18,000 of them) every four years or so. Since we're in the fifth year of the Iraq war, many school districts would now be getting their second new high school since 2003.

or, we could build 10,000 miles of interstate very year. The US interstate system has about 40,000 miles of highway, so by now every single mile of interstate highway in the US would have a duplicate lying right next to it, and many stretches of the interstate system would now be getting a triplicate.

or, we could build an underground rail tunnel, instead. Based on Russia's recent proposal for a cross-Bering Strait rail tunnel, I gather that it costs around $1 billion to build a mile of long-distance rail tunnel. So after five years, we would now be completing an entirely new, completely underground rail tunnel from Boston to New York to Philadelphia to Washinton to Richmond, and another complete tunnel running from San Francisco to LA to San Diego. In three more years we could run the rail tunnel from D.C. through Pittsburgh, Colombus, Indianapolis, and all the way to Chicago.

Or maybe you just like cutting taxes. The median household in the US (with income of around $55,000 per year) pays about $4,000 in federal income taxes. Dividing the money spent in Iraq by the 90 million households that pay tax comes to a bit over $2,000 per household per year, dropping the median household's federal tax burden in half.

Finally, maybe you want to just spend the money to make the American people safer from the threat of international terrorism. The budget for the FBI is around $7 billion per year, so if you wanted we could fund five more FBI's and devote them all exclusively to anti-terrorist efforts... and that would cost only $35 billion per year. Or if you prefer, we could triple the funding for the Department of Homeland Security. That would cost $70 billion per year.

Such comparisons don't necessarily mean that spending the money on Iraq was or is a bad idea. I happen to think that it is a horrible mistake, but these numbers don't make that case in and of themselves. To reach that conclusion, you need to consider the benefit that the US has received from the Iraq war effort.

Suppose you think that the US invasion and occupation of Iraq has not made the US safer. Well then, it's clear that the costs are not worth the benefits (or in this case, the harm).

But even if you think that it has made the American people safer, you still need to ask yourself this question: is the benefit from the US invasion and occupation of Iraq worth the enormous, gigantic, absolutely staggering financial cost? (Again, note that I'm not even getting into the personal costs, which are surely far greater.) Or put another way: is there really no better way to help improve the safety of the American people that might cost less than $200 billion per year? I have a hard time understanding how the answer to that question could be yes.

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The Street Light is written by economist Kash Mansori, who works as an economic consultant (though views expressed here are entirely his own), writes whenever he can in his spare time, and teaches a bit here and there. You can contact him by writing to the gmail account streetlightblog. (More about Kash.)